Business Growth - Capital Raising

[Chris Bates]

I'm looking for advice/experience on capital raising through business growth. FrontBox has been trading for nearly 12 months now, and has blown us away with the speed at which it's grown. We're ready to ramp things up now, and have plans ready to go on how we're doing this.

Thing is we need a $15,000 capital injection to get the ball rolling with it all. Typical story. Our cash flow is great, but it's not yet strong/large enough to fund the investment ourselves without taking larger risks.

Anyways, we've applied twice now with ANZ for the funding with a very strong application. Both times they've declined the applications with very piss poor reasoning. Ultimately our cash flow as is is plenty to repay the loan even if the investment turned sour.

Anyways, interested in other peoples experiences with capital raising in this stage.

I'm hesitant to approach an investor because I don't want the hassle of restructuring and splitting up the business. But what other avenues of financing are there that I might not know about?

Cheers,
Chris

[kylieshort]

Unfortunately there's not a lot of options for people who haven't been in business for very long. Are you able to apply for a credit card? There are some good deals going around atm. We moved from an ANZ credit card to Bankwest and got 1.98% for 9 months then 10.5% thereafter instead of the standard 18%.

Most banks will want to see at least 2 years of financials (as prepared by your accountant for your income tax return) and your business plan. Even then they'll be wary because of the GFC.

Good luck with it! I feel your pain. I was stuck a few months ago and needed a cash injection to expand my business. The bank said no so I had to do it the hard way and wait for cashflow to become healthier or borrow money from someone else. I ended up borrowing $5k from my FIL and have nearly paid it back.

[Chris Bates]

Credit cards are an option for us, but wary of the interest. If we were to do something like that with Bankwest though, we could do it no dramas. We plan to repay in 12 months anyway.

I might see if Bankwest can offer us that deal, in which case we'd go with that. If not, we'll keep looking for some other financing.

Thanks Kylie!

[kylieshort]

You need to make sure of the rate once the introduction rate is over. That's where you might get stung.

[Burgo]

Another option is a personal loan or an increase in your overdraft.

Ther are other lending facillities other than the banks, shop around, you may just find that they could be more customer friendly.

It appears to me that Bank dont want customers.............just profit.

[bluetiger]

Late reply i know

You could still use an Angel Invester, there are a lot out there who don't want to pay a large role in your business but are just looking for a good return on there investment. If you can show them that your business is profitable and can show that the injection of the 15k will further increase your returns then i think Angels would be really interested. I suggest looking into it further, here's a site that could be a lot of help to you australianinvestmentnetwork.com